What is it with this whole "GM MUST DIE!" meme propagating in the progressive/eco blogosphere? From Matt Yglesias still thinking that somehow it's okay if GM liquidates to the eco-bloggers who seem positively gleeful about GM's possible demise, it really is quite shocking. We just elected the most progressive president since LBJ and now we want him to preside over the mass layoffs of up to three million workers at a cost to the government of, according to Bloomberg, up to $200 billion? In the middle of a Depression?! Judas Priest!! WHAT is UP with THAT?! I do know this - somewhere Herbert Hoover is smiling.
The New Republic's Jonathan Cohn, at least, is having none of it. Nor is Paul Krugman (and he's a Nobel Prizewinner!) Are the Big Three blameless? Far from it. Should some or all of GM senior management be shown the door. Yes: Mr. Lutz, here's your hat. But let them all burn? To say it's an over-reaction is an understatement. Things really are changing in Detriot. The unions have given concession after concession and restructured their labor contracts to reduce the impact of health and pension benefits. And Cohn explains how the improvements are in the showroom and on the factory floor as well:
According to the most recent Harbour Report, the benchmark guide for manufacturing prowess, Chrysler's factories now match Toyota's for the most productive, while both Ford's and GM's are improving. (A Toledo Jeep factory was actually named the nation's most efficient.) Consumer Reports now says Ford's reliability is approaching that of perennial leaders Honda and Toyota, whose ratings actually slipped last year. In late 2010, GM will introduce the Chevrolet Volt, a plug-in hybrid that can go 40 miles without gas, and the Chevrolet Cruze, a compact that relies solely on gas but that gets 45 miles to the gallon. The Volt would represent a rare leap ahead of the Japanese, who never embraced plug-in technology with the same enthusiasm. It's also typical of the better cars that observers say Detroit has in store. "There's a lot of accumulated negativity about these companies out there," says Wharton's John Paul MacDuffie, who directs the International Motor Vehicle Program. "U.S. consumers gave the Big Three the benefit of the doubt for a long time before turning away from them, and now their reputation is worse than their actual performance and progress toward needed reforms."The Chevy Volt, by the way, is a huge deal. Not only will it be the world's first commercially-produced plug-in hybrid, but it will use a lithium-ion battery. Today's hybrid's use nickel batteries. Nickel mining is highly competitive with coal as the worst, most environmentally devastating, carbon-intensive industry. As a result, every hybrid drives off the lot carrying a "carbon debt" which, according to Wired Magazine, takes over 45,000 of driving to "drive off." Lithium ion is the acknowledged future of battery technology, and GM would be first out of the gate. But better to spite our faces, right?
But wait, there's more! After cheerleading for 3 million pink slips, most bloggers then say, "well, if we HAVE to bail those bastards out, at least attach some "green" strings," as if that's some meaningless little thrown bone. Um, hello? Has anyone been paying attention? Mileage standards have been stuck at around 27mpg for 20 years and will only need to go up another 8mpg over the next 12 years. In one swell foop we could revolutionize those standards, thus breaking a decades long political logjam. As Joe Romm (an eco-expert who supports a bailout) points out, greener cars will play a major role in lowering our carbon footprint. And here comes a once in a lifetime opportunity to show some fortitude and remake an industry. But, no, no. Better to make the "safe" decision and go with the pink slips.
And let's not forget Democrat John Dingell, congressman from Michigan, who has "protected" the auto industry from reform since long before most readers of this blog were born, and would jump on any bailout bandwagon, no matter what the industry was forced to do. Heck, he'd probably eat his Energy and Commerce Committee chairman's gavel if an amendment that so required was attached to bailout legislation, rather than oversee the destruction of the industry.
And I would also suggest that you turn your heads, oh you Big Three killers, and look whose shining face rests on the pillow next to you. It's none other than the GOP, which is honestly and truly gleeful at finally FINALLY destroying one of the last powerful unions left. There are strange bedfellows and there are toxic bedfellows. Just thinking about it makes me want to take a shower.
So, let's stop debating the possibility of bailing on the bailout and start debating the best way to help an industry transform itself for a carbon-neutral future. Can I hear a "Yes, We Can!"
[Updated: 2:30pm] My Blogger Ethics Advisor informed me that in my rush to post this, I neglected to mention that I, like the TNR's Jonathan Cohn, have a family connection to GM. In the wake of an accounting scandal a couple years ago, my father was named to the GM board to help improve financial controls. But you only need to read the above post (especially the bit about Bob Lutz) to see that I am not exactly a mouthpiece for GM. I myself don't own a single share of the company and a GM default would have zero bearing on my finances. The fact that GM itself doesn't want to die and I don't think it's such a hot idea either are about the extent our common ground... That's blogging on an empty stomach for you!
Photo by GM